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After a dismal performance in 2013, precious metal funds, in
particular gold ETFs, have been shining in recent sessions as the
biggest asset gainers with a strong run up in their prices too. In
fact, the yellow metal extended its rally and climbed to a
three-month high last week on U.S. economic growth worries and
strong demand (read:
The Real Winner from the Precious Metal ETF
Rally
).

Currently, gold is trading above $1,300 per ounce with some
forecasting a bigger increase in the days ahead. This is largely
due to a rise in weekly jobless claims, unexpected drop in January
U.S. retail sales, and a sharp decline in manufacturing activity
that continued to weigh on the dollar and raised concerns on Fed
tapering plans. This has resulted in a safe haven appeal across the
board.

Additionally, emerging market weakness and signs of slowdown in the
world's second largest economy further boosted the demand for gold
and the related ETFs.

With that being said, the ultra-popular
SPDR Gold Trust ETF (
GLD
)
, with an asset base of around $34.2 billion and average daily
volume of about 8.5 million shares, pulled in more than $386
million in capital and rose over 4% last week. The fund tracks
almost 100% the physical price of gold bullion measured in U.S.
dollars, and is kept in London under the custody of HSBC Bank
USA. GLD has a Zacks ETF Rank of 3 or 'Hold' rating.

The mining ETF counterpart -
Market Vectors Junior Gold Miners ETF (
GDXJ
)
- accumulated nearly $104 million in assets, propelling the total
base to $1.9 billion. GDXJ is a small cap centric fund and provides
global exposure to 68 gold mining firms. Canadian firms take the
lion's share at 65.5%, though Australia (19.2%) and the U.S.
(8.2%), round out the top three.

China Gold International Resources, Mcewen Mining and Semafo occupy
the top three positions with 4% share each. The ETF charges 55 bps
in fees per year and sees solid volume of nearly 1.6 million shares
a day. The ETF was a top performing fund last week gaining nearly
14.4% (read:
3 Mining ETFs Crushing The Market in 2014
).

Energy ETFs Failed to Impress

The energy ETFs space was struggling on lower oil prices led by
waning demand and increasing global supplies. The feeble U.S. data
of late made investors worry about sustained economic growth
suggesting weaker demand for oil in the near term (see:
all the energy ETFs here
).

Further, crude oil inventories rose 3.3 million barrels in the week
ending February 7, up from the market expectation of 2.7 million
barrels, as per the U.S. Energy Information Administration. This
soft inventory report weighed on oil prices. Moreover, though cold
weather has boosted the demand for fuels like heating oil and
natural gas, it forced Americans to stay at home thereby resulting
in lower traveling and less use of gasoline.

As a result, many energy ETFs saw huge outflows last week with
iShares U.S. Energy ETF (
IYE
)
leading the way. IYE lost nearly $636 million in capital, bringing
its asset base to under $1.22 million. This ETF tracks the Dow
Jones U.S. Oil & Gas Index, giving investors exposure to 85
energy stocks.

Exxon Mobil (
XOM
) and Chevron (
CVX
) occupy the top two positions in the basket and take the bigger
chunk of assets at 22.17% and 12.01%, respectively. From a sector
perspective, oil & gas producers make up for three-fourths
share, while oil equipment services and distribution takes the
remainder (read:
Big Oil Earnings Drag Down Energy ETFs
).

The product charges 45 bps in fees per year and trades in average
daily volume of roughly 700,000 shares. Despite the outflows, the
ETF was up about 1.8% last week.

Other energy ETFs -
Energy Select SPDR (
XLE
)
and
First Trust Energy AlphaDEX (
FXN
)
-shed $288 million and $268 million, respectively. All the three
funds have a Zacks ETF Rank of 4 or 'Sell' rating, suggesting that
investors should avoid these due to unfavorable macro environment
and asset outflow trend, as these might catch up to the energy ETF
space before long.

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